Nawinder Kaur, Jamshedpur V. ITO, Jamshedpur

ITA 163/RAN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0005 (ITAT-RANCHI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 28-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Assessee Lawyers: JAGDISH KHANDELWALA
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.163 /RAN/2016 ASSESSMENT YEAR : 2007 - 08 NAWINDER KAUR, 127, C.ROAD, SONARI, JAMSHEDPUR VS. ITO, WARD 3(3), JAMSHEDPUR PAN/GIR NO. AKOPK 6954 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI JAGDISH KHANDELWALA , AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 15 /12/ 2016 DATE OF PRONOUNCEMENT : 15 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - JAMSHEDPUR , DATED 28.3.2016 , FOR THE ASSESSMENT YEAR 2007 - 08 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE GENUINE LONG TERM CAPITAL GAIN OF RS.4,36,045/ - AS UNDISCLOSED INCOME U/S.68 OF THE ACT. 3. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SHOWN LONG T ERM CAPITAL 2 ITA NO.163 /RAN/2016 ASSESSMENT YEAR : 2007 - 08 GAIN OF RS.4,36,045/ - FROM SALE OF 2500 SHARES OF BSR FINANCE, WHICH WAS NOT GENUINE AND HENCE, HE ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CA SH CREDIT FROM OTHER SOURCES , WHICH WAS CONFIRMED IN APPEAL BY LD CIT (A). 4. BEFOR E ME, LD A.R. OF THE ASSESSEE RELIED ON THE DECISION OF HONBLE JHARKHAND HIGH COURT IN THE CASE OF CIT VS. ARUN KUMAR AGARWAL (HUF) AND OTHERS IN TAX APPEAL NO.4 OF 2011 AND OTHERS ORDER DATED 13.7.2012 AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT WHERE SHARES WERE SHOWN BY THE ASSESSEE IN EARLIER YEARS BALANCE SHEET SUBMITTED BY THE ASSESSEE, IN THAT SITUATION, HOW THE REVENUE CONDEMNED THE TRANSACTION EVEN ON THE GROUND OF STEEP RISE IN THE SHARES. IF WITHIN A PERIOD OF ONE YEAR, THE SHARE PRICE HAS RISEN FROM RS.5 TO RS.55 AND FORM 9 TO 160 AND ONE PERSON WAS HOLDING THE SHARES MUCH PRIOR TO THAT START OF RISE OF THE SHARE, THEN HOW IT CAN BE INFERRED THAT SUCH PERSON ENTERED INTO SHAM TRANSACTION FEW YEARS AGO AND PREPARED FOR GETTING THE BENEFIT AFTER FEW YEARS WHEN THE SHARE WILL START RISING STEEPLY. IN THE PRESENT CASE, EVEN THERE WAS NO REASON FOR SUCH SUSPICION WHEN THE SHARES WERE PURCHASED YEARS BEFORE THE UNUSUAL FLUCTUATION IN THE SHARE PRICE AND DISMISSED THE APPEAL OF THE REVE NUE. HE SUBMITTED THAT IN THE CASE OF THE ASSESSEE ALSO, THE SHARES UNDER DISPUTE WERE PURCHASED BY THE ASSESSEE ON 5.4.2004 FOR RS.14,425/ - AND REFLECTED IN THE BALANCE SHEET FILED WITH THE DEPARTMENT AS ON 31.3.2005. THESE SHARES WERE SOLD FOR RS.4,36,7 25/ - ON 24.7.2006 AND EARNED LONG TERM CAPITAL GAIN OF 3 ITA NO.163 /RAN/2016 ASSESSMENT YEAR : 2007 - 08 RS.4,21,621/ - . THESE SHARES WERE SHOWN IN DE MAT ACCOUNT ON 24.6.2005 AND FILED COPY OF TRANSACTION STATEMENT OF NATIONAL SECURITIES DEPOSITORY LIMITED PLACED AT PAGE 13 OF TRHE PAPER BOOK. HENCE, IT WAS HIS SUBMISSION THAT THE FACTS OF THE ASSESSEES CASE ARE SQUARELY COVERED BY THE DECISION OF HONBLE JHARK HAND HIGH COURT IN THE CASE OF ARUN KUMAR AGARWAL (HUF) AND OTHERS(SUPRA) AND FOLLOWING THE SAME, THE ADDITION SHOULD BE DELETED. 5. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 6. I FIND IN THE INSTANT CASE, THE ASSESSEE HAS PURCHASED 2500 SHARES OF BSR FINANCE ON 5.4.2004 FOR RS.14,425/ - . THEREAFTER, THE ASSESSEE HAD SHOWN THE SAME IN DEMAT ACCOUNT WITH NATIONAL SECURITI ES DEPOSITORY LIMITED ON 24.6.2005 AND SOLD THE SAME ON 24.7.2006 FOR A CONSIDERATION OF RS.4,36,725/ - . HENCE, THE ASSESSEE DISCLOSED LONG TERM CAPITAL GAIN OF RS . 4,21,621/ - . THE ASSESSING OFFICER DID NOT ACCEPT THE PURCHASE AND SALE OF SHARES OF THE ASS ESSEE AND HENCE, TREA T ED THE AMOUNT OF RS.4,36,045/ - AS UNEXPLAINED CASH CREDIT FROM OTHER SOURCES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. ON APPEAL, LD CIT(A) CONFIRMED THE SAME. I FIND THAT THE FACTS OF THE ASSESSEE ARE SQUARELY COVERED BY TH E DECISION OF HONBLE JHARK HAND HIGH COURT IN THE CASE OF ARUN KUMAR AGARWAL (HUF) AND OTHERS (SUPRA) AND, THEREFORE, RESPECTFULLY FOLLOWING THE SAME, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES 4 ITA NO.163 /RAN/2016 ASSESSMENT YEAR : 2007 - 08 AND DELETE THE ADDITION OF RS.4,36,045/ - AND ALLOW THE GROU ND OF APPEAL OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO N OUNCED IN THE OPEN COURT ON 15 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 15 /12 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : NAWINDER KAUR, 127, C.ROAD, SONARI, JAMSHEDPUR 2. THE RESPONDENT. ITO, WARD 3(3), JAMSHEDPUR 3. THE CIT(A) JAMSHEDPUR 4. CIT , JAMSHEDPUR 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//